Federal Income Tax Calculator

How Form 1040 federal income tax works

Form 1040 starts with line 11 AGI. You subtract your line 12e standard deduction or Schedule A total, plus line 13b Schedule 1-A deductions. What remains is line 15 taxable income (26 U.S.C. § 63). This page does not subtract a line 13a qualified business income deduction (Form 8995). Self-employed, gig, and rental filers who qualify for one will see higher taxable income than their return shows.

Under 26 U.S.C. § 1(j), ordinary taxable income runs through seven rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Moving up a bracket taxes only the dollars above that line. Earlier dollars keep their lower rates.

Under the Instructions for Form 1040 (line 16), taxable income below $100,000 uses the Tax Table, which 26 U.S.C. § 3 lets the IRS set up to a ceiling amount. At $100,000 or more, Form 1040 uses the Tax Computation Worksheet. The Tax Table sets $0 below $5 and uses two $10 rows from $5 to $25. It then uses $25 rows up to $3,000 and $50 rows up to $100,000, rounded to whole dollars. Each row's tax is the bracket tax at the row's midpoint, rounded to whole dollars, so the 2025 $3,000 to $3,050 row shows $303. For 2026, this page projects the table: the 2025 table's rows and midpoint rule applied to the Revenue Procedure 2025-32 brackets.

Long-term capital gains and qualified dividends use the 25-line worksheet on Form 1040 line 16 (26 U.S.C. § 1(h)). Ordinary taxable income fills the lower space first. Those gains sit on top across the 0%, 15%, and 20% tiers. Test a standalone sale in the capital gains tax calculator.

Form 1040 tax formula

Base deduction = Schedule A itemized, or § 63 standard deduction (§ 63(c)(6)(A) $0 MFS rule, § 63(c)(5) dependent cap, + § 63(f) age/blind boxes)
Senior deduction (§ 151(d)(5)(C), 2025–2028; $0 if MFS) = eligible 65+ count × max($0, $6,000 − 6% × max($0, AGI − threshold))
Line 15 taxable income = max($0, AGI − base deduction − senior deduction)
Ordinary taxable = max($0, line 15 − qualified income); Preferential taxable = line 15 − ordinary taxable
Line 16 tax = Tax Table (< $100,000; projected for 2026) or Tax Computation Worksheet (≥ $100,000), or 25-line QDIV/LTCG Worksheet when preferential taxable > $0
Phased-out credit (§ 24) = max($0, $2,200 × children + $500 × other dependents − $50 × ceil(max($0, AGI − threshold) ÷ $1,000))
Line 19 nonrefundable credit = min(line 16, phased-out credit); Line 24 total tax = line 16 − line 19
Line 28 ACTC (Part II-A) = min(phased-out credit − line 19, $1,700 × children, 15% × max($0, earned income − $2,500))
Net federal tax = line 24 − line 28; Refund (+) or amount owed (−) = withholding + line 28 − line 24

Worked Form 1040 examples

Take a 2026 Single filer with $75,000.00 of AGI and $8,000.00 withheld. The $16,100 standard deduction leaves $58,900.00 on line 15. In the projected 2026 Tax Table ($58,900.00 to $58,950.00 row, midpoint $58,925.00), line 24 tax is $7,676.00 (10.23% of AGI) for a $324.00 refund. Exact 26 U.S.C. § 1(j) brackets give $7,670.00 and a $330.00 refund.

Take a 2026 joint return with $160,000.00 of AGI ($20,000.00 in qualified dividends), 2 kids under 17, and $14,000.00 withheld. Subtracting $32,200 leaves $127,800.00 on line 15: $107,800.00 ordinary and $20,000.00 at qualified rates. Since line 5 ($107,800.00) is at least $100,000, Worksheet line 22 uses exact brackets ($13,140.00), and line 18 adds 15% of $20,000.00 ($3,000.00). Line 16 is $16,140.00, and $4,400.00 of child credits cut line 24 to $11,740.00 ($2,260.00 refund).

Take a 2026 Head of household with $28,000.00 of wages, 2 kids under 17, and $1,000.00 withheld. Subtracting $24,150 leaves $3,850.00 on line 15 and $388.00 of projected Tax Table tax on line 16 (midpoint $3,875.00). Line 19 uses $388.00 of the $4,400.00 credit to bring line 24 to $0.00. Under 26 U.S.C. § 24(d)(1)(B)(i) and (h)(5), the $3,400.00 two-child cap beats $4,012.00 left over and the $3,825.00 earned-pay cap. Line 28 pays $3,400.00 for a $4,400.00 total refund.

Scope, limits, and assumptions

• This page models full-year U.S. citizen or resident Form 1040 returns. It covers regular tax, standard or Schedule A deductions, the Schedule 1-A Part V senior deduction, and Schedule 8812 credits. Form 1040-NR and short-year returns follow other rules (26 U.S.C. §§ 3(b)(1), 24(f), 63(c)(6)(B)–(C)). It does not model the line 13a qualified business income deduction (Form 8995 or 8995-A). Taxable income is overstated for filers who qualify for it. Check the self-employment tax calculator, alternative minimum tax calculator, net investment income tax calculator, earned income credit calculator, and kiddie tax calculator.
• Line 11 AGI stands in for MAGI in the 26 U.S.C. § 24(b) credit phase-out and the 26 U.S.C. § 151(d)(5)(C)(iii) senior phase-out. Excluded pay under 26 U.S.C. §§ 911, 931, or 933 adds back to MAGI. Electing § 911 also bars line 28 ACTC under 26 U.S.C. § 24(d)(3).
• Other 2025–2028 Schedule 1-A deductions (26 U.S.C. §§ 63(b)(5)–(7), 163(h)(4), 224, 225) are not in this form. Those are tips (Part II, up to $25,000), overtime pay (Part III, up to $12,500, or $25,000 joint), and car-loan interest (Part IV, up to $10,000). On the default 2026 Single return ($75,000.00 AGI), $8,000 of qualified tips drops line 15 from $58,900.00 to $50,900.00. That cuts projected Tax Table line 24 tax by $1,760.00, from $7,676.00 to $5,916.00.
• With 3 or more kids under 17, 26 U.S.C. § 24(d)(1)(B)(ii) adds a Part II-B FICA-minus-EITC test. It applies whenever the earned-pay formula falls below the per-child cap. On $32,000.00 of 2026 joint wages with 3 kids, the earned-pay formula pays $4,425.00 against a $5,100 ceiling. FICA and EITC are not in this form. The summary flags every return where Part II-B could raise line 28. The scenario grid, rate curve, and filing-status notes say so whenever 3 or more kids could be affected.
• On the Form 1040 line 16 capital-gain worksheet, line 22 uses the Tax Table when line 5 ordinary taxable income is under $100,000. Line 24 checks on its own whether line 1 total taxable income is under $100,000. The 28% collectibles rate and 25% section 1250 gain rate under 26 U.S.C. § 1(h) are not modeled.
• The flat state rate multiplies AGI by one rate from 0% to 20%. It does not model state brackets, deductions, or credits.

These figures are estimates for learning and planning, not financial, tax, legal or investment advice. Terms of use.

What to do with your estimate

On the default return, you could withhold $12.46 less per paycheck over 26 pay periods and still owe nothing. If you owe tax, raise paycheck withholding for Form 1040 line 25a. Or plan estimated tax payments for Form 1040 line 26 in the quarterly estimated tax calculator.

Pre-tax savings cut income in your top bracket first. On the default $75,000.00 return, $5,000.00 in a pre-tax plan saves $1,100.00 at 22.00% in the 401(k) calculator.

Switch Deduction to Itemized deductions if your Schedule A total beats your standard deduction on Form 1040 line 12e. On the default return, itemizing pays only above $16,100. Each $1,000.00 above that cuts line 24 tax by $220.00 up to $24,600.00, then about $120.00. Test your list in the itemized vs. standard deduction calculator. From 2025 through 2028, the 26 U.S.C. § 151(d)(5)(C) senior deduction adds on top of either choice, except if Married filing separately.

Federal income tax questions